Analysis of Politics, Philosophy and Economics from a Marxist Perspective

Thursday, 7 February 2013

Capital I, Chapter 23 - Part 3

Of course, this process of
reproduction under capitalism, whereby the worker works to produce
the means of production and consumption, which the capitalist then
sells, and out of these proceeds buys new means of production and
labour-power, must have had a beginning. In other words, at some
point, prior to this capitalist production, the capitalist must have
had money available to buy means of production and labour-power.
Marx deals later with this process of Primary Accumulation.

“However this may be, the mere continuity of the
process, the simple reproduction, brings about some other wonderful
changes, which affect not only the variable, but the total capital.”
(p 534)

Marx then proceeds to argue
that once this process of simple reproduction under capitalism begins
the nature of capital is transformed. The original capital, he says,
may have been the result of abstinence by the capitalist, but the
process of reproduction changes this so that eventually the whole of
this capital is nothing more than accumulated surplus value. I have
to say, I am not convinced by Marx’s argument in the form he
presents it.

In fact, I think here, Marx
makes the same mistake as that made by Senior and others previously
criticised by Marx in relation to the working day. That is he tries
to make the labour-time expended, and new value created by the
worker, not just cover the workers' wages and the surplus value, but
the replacement of the constant capital too.

Marx says, suppose a
capitalist begins with a capital of £1000. He makes £200 a year in
surplus value on it. Marx says, assume he consumes all of this £200.
In five years, he will have consumed £1,000 = his original capital.
If he only consumes £100, then it will take 10 years to have
consumed his original capital. Marx develops a law from this:

“General Rule: The value of the capital advanced
divided by the surplus-value annually consumed, gives the number of
years, or reproduction periods, at the expiration of which the
capital originally advanced has been consumed by the capitalist and
has disappeared.” (p 534)

The capitalist, Marx says, thinks he is consuming out of the surplus value created by the
worker, but he isn't, he is really consuming his original capital,
and although the original buildings etc. he bought with his original
capital are still there, these simply reflect the other side of the
debt he has built up on them by drawing down on their value in order
to consume. The equivalent today is someone who continues to consume
by continually re-mortgaging their house when its market price rises.

But, Marx’s argument here
does not stand up. Suppose, for instance, the capitalist made no
surplus value on their capital. Would that mean that the constant
capital was gradually eroded? Well it would if the capitalist each
year took money out of the business intended for the reproduction of
the constant capital. But, if they didn't, then the constant capital
would continue to be reproduced. That is because, the Constant
Capital is not reproduced out of the Surplus Value produced, which is
the implication of Marx’s argument here, but is reproduced in the
value of the end product into whose value it has been transferred.

Suppose the capitalist was
also a worker, or had an income from elsewhere to live on, and so
could survive for some time, without the business producing surplus
value. That frequently happens with new businesses. In fact, many
of them frequently run at a loss for the first few years. We might
then have:

C 1000 + V 200 + S 0 = E
1200.

When the output is sold,
1000 goes back into buying means of production i.e. reproducing the
original capital, and 200 to purchasing labour-power. The original
capital is not reproduced out of the surplus-value produced by the
worker, as Marx oddly suggests here, but is reproduced automatically
as he previously set out, as a result of its value being transferred
to the end product! Even without surplus value being produced, this
capital will then always generate sufficient value to buy replacement
means of production, and labour-power. Consequently, any surplus
value produced above that, and not used for accumulation, does indeed
go to fund the capitalists' consumption, rather than that consumption
coming out of drawing down the value of the original capital.

As soon as a proportion of
the surplus-value is actually accumulated then Marx is correct. This
new capital is no longer the capital they have accumulated by their
own means, but is simply the appropriated labour of the worker.
Ultimately, then, for all intents and purposes, the great mass of
capital is nothing more than this appropriated surplus value.Back To Part 2

About Me

Left school at 16. Became an ASTMS shop steward at 19, and a lifelong trade union activist. Delegate to North Staffs Trades Council 1974-87. Secretary North Staffs Miners Support Committee 1984-5. President North Staffs Trades Council 1985-6 and 1986-7. Delegate to Staffordshire Association of Trades Councils 1985-7. Delegate West Midlands Regional Council of the TUC 1985-7. Secretary Newcastle UNISON 2000-2.
Member of the International Communist League/Workers Socialist League 1974-87.
Went to University as mature student at age of 24. Obtained Joint Honours Degree in Economics and Politics with Philosophy and Statistics, followed by a Post Graduate Certificate in Education.
Labour Party member since 1974. Stoke City Councillor 1983-4, expelled from Labour group 1983, and resigned from Council in 1984 because of refusing to vote for rent and rate rises, and budget cuts. Staffordshire County Councillor 1997-2005.
Assistant Secretary Stoke District Labour Party 1981, and held pretty much every position from Executive member, to Branch Secretary, and Branch Chair.